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What Is RTP and How Can an Online Casino Lose Money on “Generous” Slots

RTP in games that you meet on sites like Vulkan Vegas 25€ no deposit stands for return-to-player rate. It is a percentage that represents how much a slot is going to give back to the players. It is often a misunderstood concept — many players think that it is the amount of money the casino will give away. No, it is not.

Today, we will discuss what RTP is and how an online casino can lose money in “generous” slots. In the end, you will have a better understanding of what is it and how it works.

What Is RTP?

RTP is a probability — it is a percentage that tells players how much a slot machine is likely to return to all gamers as payment, and whatever is left is kept by the casino or game operator.

For example, if the ‘Return to Player’ of a slot machine is 90%, it means that if there was a total of $100 in bets, $90 of that will go back to the players, and the casino only keeps $10. The 90% is never a guarantee that each player will get $90. It is merely a probability based on the game’s design.

Confusing? Think about it this way: we play a coin toss. The head has a probability of 50%, and the tail also has a probability of 50%.

If you bet $1 on the head and another player bets $1 on the tail, only one result will come out. Let us say that it is the head. The player who won will get his $1 back, and the casino will give him $0.90 from the bet of the other player. We keep $0.10 as a profit. In this case, the RTP is 95%. How did that happen?  

Casino takes $2 in bets. Then, by the game’s design, they give back $1.90. This amount, $1.90, is 95% of the total bet they received, which is $2. Then, they only get to keep 5%, which is $0.10.

As you can see, this is not a guarantee that the casinos will always give way to 95%. Sometimes, a player may bet more than $1 on the head, and then another pair will bet more than $10 on the tail. The thing is that by design, the casino only takes 5% of the bets, provided all players wagered equally.

How Can Casinos Lose in Generous Slots?

First of all, allow us to clarify what generous slots mean. Generous slots are those that have a high RTP. It is not uncommon for slot machines to have RTPs of about 90% only.

Generous slots are those that have high return-to-player rates. If you recall the coin flip example earlier, it only means that the casino is giving a higher prize (from the money of the player who lost).

So, if we go back to the example, we can expect generous slots to give more money to the players than non-generous slots. If you think about it, the casino is not losing money.

There is no way a casino can lose money in generous slots. Why? Because the RTP is not 100%. In any case, even if the RTP is 98%, the casino, by design, still retains 2% of the bet.

Variance and RTP

What is variance? Is it the same as RTP? No, variance is not the same as the ‘Return to player’ concept. Variance refers to the difficulty of landing a winning combination. The variance of a slot machine is expressed as low, medium, and high.

Low variance means it is easy to make a winning combo. The high one means it is hard to make a winning combo.

Let us say that a slot has three reels and only one payline. If each reel has two symbols and you want to line up the cherry, the likelihood of the cherry appearing on the first reel is one out of two symbols, or 0.50. The same thing goes with the other two reels.

Your likelihood of landing a winning combo is 0.50 x 0.50 x 0.50 = 0.125 or 12.5.74%. As you can see, this variance is low — it is easy to land that combo.

If we do the same math, but this time, we have six symbols in one reel, the likelihood of landing a winning combo now is 0.00462963 or 0.463%. As such, the variance of this slot machine is high. It is difficult to land a winning combo, but then the prizes are also higher.

RTP is a commonly misunderstood concept in the world of slot machines. Many players think that if the RTP is 95%, they will win back 95%. This is not the case. The RTP merely represents the possible amount of money the casino or slot machine can give back to the players.

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